The Dotcom Bubble

The period from 1997 to 2000 was marked by the launch of several new Internet-based ventures. A combination of rapidly increasing stock prices, market confidence, individual speculation and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics in evaluating these companies.

Communication evolved further with companies taking the Internet route to convey their messages to a global audience. MSN, for instance, launched its MSN Mobile 4.0, a version of its wireless service that delivered customizable information services to interactive pagers, mobile phones and handheld devices. But with the US Federal Reserve increasing interest rates in March 2000, the global economy began to lose speed. Over the next twelve months, many hitherto high-flying internet startups burned through their cash and went bust. A majority of the dotcoms ceased trading after going through their venture capital, with many never having made a net profit.